U.S.-Mexico text may preview Canada's NAFTA prospects

The U.S. trade representative was expected to post text online this weekend that will lay out more of what Mexico has agreed to so far in the renegotiation of the North American Free Trade Agreement.

While Robert Lighthizerportrayed the preliminary agreement in principle announced in late August as exclusively bilateral, it mayinclude at least a dozen chapters reportedly closed between all three NAFTApartners.

That means that at least indirectly, thedocument expectedover this weekend may reveal more than has been previously confirmedabout Canada's negotiations to date.

Mexican government officials have sent mixed signals on whether some of what they agreed to is viable without Canada.

Nevertheless, Mexico hasnot opposed the Trump administration's moves to proceed. Mexico's economy ministry wasexpected to publish text on its website on Friday evening.But a decision was later taken to delay the publication in order to give Canada more time to come on board.

Lighthizersaid during an event in New York Tuesdaythat even though the Donald Trump administration is movingtowardssignature with Mexico, talks with Canada will continue.

"If we can't get an agreement with Canada, we're not going to walk away from one with Mexico. It makes no sense," he said.

As for Canada, "we'll have to do something separately as soon afterwards as we can," he told the ConcordiaSummit."We're certainly not going to give up."

The USTRis required to post text of an agreement 60days in advance of signing it, meaning this weekend is the deadline. The outgoing Mexican presidentleaves office on Dec.1.

Missing this window would be "unfair to all the people involved,"Lighthizersaid, addingAmericansdon't know how negotiations might go with the next Mexican president.

While hesounded frustrated at not concluding talks with Canada, he didn't show the personal animosity U.S. President Donald Trump lobbed at Canada's negotiating style, remarksthat sparkeda flurry of stand-by-our-team defensiveness in Ottawa and beyond.

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No Congressional vote soon

It's not clear exactly what kind of text will be posted for Congress, nor how it will be received.

Former officials familiar with legal work required to prepare text for signaturedoubtthe USTRhad enough time to rewrite any text drafted on the premise ofCanadagoing along.

In the case of the automotive chapter, some of the rules-of-origin calculations may have been basedon all three countries participating in the tariff-free North American supply chains, not just two.

Regardless, any text released need not be what Congress eventually votes on. There's a long committee consultation process ahead toprovide feedback before votes begin.

The timelines for that process make it all but impossible for the current Congress to approve this deal.Instead, the earliest possible timeline for the new Congress to vote appears to be February or March in2019.

Even that assumes something that's not a given: Congress agreeing with the Trump administration that its authorizationto renegotiate the currently trilateral NAFTA would apply to this attempt at fast tracking text for a deal that leaves one country out.

That kind of endorsementappeared elusive Thursday, after the USTRbriefed both the Senate finance committee and the House ways and means committeethat havejurisdiction over trade votes.

Democrats emerged from that meeting panning the strategy of proceeding without Canada.

Oregon Sen.Ron Wydencalled it "malpractice, both for economic and political reasons," and said the Trump administration was "surrendering on fixing NAFTA."

Chapter previews?

Canadian negotiators have been tight-lipped on the details of what they may or may not have already signed off on, focusing instead on occasional revelations about what the final sticking points are.

In that respect, thistext may be illuminating.

The existing NAFTA has 22 chapters, but various officials have suggested Canada may have made progress at convincing the other two countries to add chapters on gender equality and Indigenous rights. New chapters coveringthe digital economy and e-commerce were also expected.

Earlier in the summer, Mexican officials said nine or ten chapters were closed trilaterally. Canadian officials told CBCNews earlier this month that another three chapters closed during bilateral talks between Canada and the U.S. over the last month.

The text mayalso include at least one highly-anticipated side letterlaying out automotive export restraints Mexico agreed to in return for not facing the car tariffs Donald Trump keeps threatening.

In late August, it wasn't clear exactly what Mexico agreed to for the three dispute resolution chapters in the current NAFTA.Canada's been fighting hard to keep the ability to refer unfair U.S. duties to NAFTA panels for arbitration, so this part of the text may be what Canadians turn to first.

It's unclear whether Canada has signed on to the reforms previewed for the existingChapter 11 investor-state dispute settlement process.

The August announcement was also silent on the future of Chapter 19, one of the remaining sticking points between the U.S. and Canada.

Nor did officials say what's happening to Chapter 20, the state-to-state dispute resolution process which, while rarely used, is arguably of critical importance. The ability of the World Trade Organization to mediate global trade disputes effectively appears more and more in doubt.

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Language on environmentaland labour protections previously relegated to side letters was expectedto be elevated to full chapters in the revised agreement, similar to the approach taken in the 12-country Trans-Pacific Partnership text the three countries signed in 2016. (The United States withdrew from the TPPwhen Trump took office.)

Analysts will be looking at the new language for evidence of improved enforceability, particularly in light of the support labour unions gave for NAFTA's renegotiation, amid longstandingconcerns about cheap Mexican labour offering an incentive for businesses to move south.

Key Democratic votes in Congress may hinge on labour groups feeling satisfied, and a coalition of Democrats and Republicans may be required to ratify new text.

Agricultural trade provisionsreached between the U.S. and Mexico may offer little to no insight on the state of Canada's negotiation, however. In the existing NAFTA, agricultural provisions apply on a bilateral, not trilateral, basis.